Rather than having a judge make all the decisions, it is important to develop your divorce agreement with an attorney. This will allow you to control the terms of your divorce and the life you will lead in the future. However, you need to be aware of some critical issues that are often overlooked when couples are working through the terms of their divorce agreement.
Avoiding these mistakes can save you thousands of dollars and unnecessary headaches and heartaches. While a skilled divorce lawyer should know to address these issues, be prepared to bring them to your attorney’s attention if they do not.
- Assets That Aren’t Obvious
It is illegal to hide assets from a spouse in a divorce. However, that doesn’t stop the practice. Sometimes, one spouse may forget about assets that aren’t obvious, such as old retirement accounts, frequent flyer miles, or experimental investments like purchases of cryptocurrency. Other times, a spouse may take deliberate steps to hide or block access to assets. Make sure you investigate records and include all marital assets in your divorce agreement, including:
- Contents of safety deposit boxes
- Interests in vacation property
- Reward points from credit cards and other businesses
- Intellectual and creative property (including property in digital storage)
- Assets in digital accounts
- Life insurance policies
- Art and collectibles
- Trust accounts
- Forgotten Debts
Couples divide not only their assets in divorce but also their debts. While people commonly overlook assets, it can be even easier to overlook debts, because no one wants to think about them.
Anyone contemplating divorce should pull a copy of their credit report and find out what debts are listed in their name. Everyone should be accounted for in the separation agreement. Some debts that are in the names of both spouses should rightfully only be in the name of one. Make sure to address those issues.
- Tax Issues
The I.R.S. is a common enemy for both spouses in a divorce. Many couples can save substantial sums by consulting a tax accountant or financial planner to advise them on the best ways to minimize tax liability during and after the divorce. It is also important to consider the after-tax value of investments when dividing them. And don’t forget to split up any expected tax refunds or debt.
- The Effect of Inflation
The value of certain assets and the costs of certain expenses addressed in divorce agreements should factor in the effects of inflation. If one spouse agrees to cover college costs, they should be aware that those costs can double in less than 15 years at a common rate of inflation.
- Death or Default of a Paying Spouse
If one spouse is relying on long-term payments from the other spouse, they need to consider what would happen if the other spouse were to default on payments or pass away. It might be better to opt for a smaller sum upfront or in a compressed time frame.
Work with Divorce Lawyers Who Know How to Protect All of Your Interests
There are many pitfalls to avoid during and after a divorce. When you work with an experienced divorce attorney at Koiles Pratt Family Law Group, you gain the benefit of knowledge and guidance that can help you avoid common mistakes and emerge ready to live your best life. Talk to us today to learn how we could help you create the right divorce agreement to meet your needs.
Ready to protect your interests, assets and relationships.
Please contact us to discuss your family legal matters by calling 978-744-7774 or using the form below.
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